PUB 401 — Short Paper #2: The Viability of Subscription-based Ebook Services

Adam Van der Zwan (301206119)
PUB 401 — November 9, 2015
Short Paper #2
Word Count: 1432

The Viability of Subscription-based Ebook Services

 

It has been speculated that there will be dramatic changes to future trends of the book publishing industry in that content will be predominantly ‘accessed’ and not ‘owned’ (Polanka, 2013, p. 65). While libraries have been accomplishing this for ages, the dominant business models in the market book industry have been vastly reshaped due to the proliferation of digital publishing, the Internet, and shifts in copyright laws that allow for the proper connections to accessing ‘new age’ books. Such components have changed the way these books are produced, distributed, marketed, acquired and read, in order to provide a way for authors make a living without selling their content directly. Though, submerged in the abundance of fresh business models is the subscription-based model that this paper will explore further. In examining the strategies and implications of third-party ebook subscription services, such as Amazon’s Kindle Unlimited and Scribd, I’ll determine their influences on individual authors, publishers, readers, and the publishing industry as a whole. This exploration will then support the thesis that subscriptions services are not, in fact, the most convenient or viable business model for today’s publishing industry.

Firstly, a subscription-based ebook service offers its customers free and unlimited access to hundreds of thousands of digital books on iPhones, computers or digital tablets, for a monthly or annual subscription fee. While a few of these services are offered directly by the publishing companies who own the books (Polanka, 2013, p. 65), most are provided by the top three third-party subscription companies, which include, Scribd, Amazon’s Kindle Unlimited, and until recently Oyster, which has now announced that it will be “sunsetting” in January, 2016. Each of these companies provide services between $9 and $10 per month, and while they each provide access to enormous collections of books a flat rate, it must be noted that each collection is subject to its own limitations with regards to which publishing companies have agreed offer certain titles. For example, according to a Forbes post from April 2015, both Scribd and Oyster offer backlist titles from three of the five major publishing houses, while at the time of the post, Kindle Unlimited offered no major-publisher titles to readers.

In examining the advantages of a subscription model one will conclude that it allows companies to work quickly and conveniently with customers, and as a Dosdoce.com study from April 2015 called “New business models in the digital age (Dosdoce.com, 2015, p. 17).” states, it provides companies with a “fixed client base and a specific timeframe [which] translates to a constant flow of revenue.” While this may sound like an ideal utopian business model, the study also briefly discusses drawbacks to a subscription service, citing the potential degradation of valuable publishing markets in that their services essentially see diminished profits because third-party service providers reap the benefits of their products, and also because these subscription services feel pressure to make sure there is a wide variety of books from each of the publishers to ensure that readers will stay interested (p. 23). Needless to say, as with most things in life, subscriptions provide for both benefits and drawbacks. The question is, do the benefits outweigh the drawbacks enough for this business model to be truly viable in furthering the creative industry?

One can first answer this question by analyzing the role of the author and the publisher in the business model. If a publisher is willing to submit its books to a subscription service, a contract is made between the publisher and the service so that each time a title is used, the publisher receives a cut of the profits. Conversely, the publishers must then devise a strategy to pay the authors of those titles (Polanka, 2015, p. 65). While Kindle and Oyster operate in this manner, Scribd deviates slightly in that it allows independent authors to submit their work directly, and thus directly receive compensation each time their title is used. Scribd entices its authors to its service by claiming that once a book has been published online, it’s available to millions of readers who can easily access each book without a “check out” process,” which means that Scribd authors will have a greater chance of their book being read. Authors with publishers who’ve signed contracts with similar subscription services all presumably receive the same benefits.

Though the real problem lies within the publisher’s domain. To begin with, it’s reasonable to assume that publishers aim to make the most profit that they can from their books. As Sue Polanka notes, “sales are revenues” (2015, p. 66). There are far greater monetary benefits to both publishers and authors if a book is sold separately as its own product, rather than to be clumped together into a large collection of books sold at a monthly flat fee. A subscription model undoubtedly causes sales to drop which can harm the publisher’s business objectives as well as its relations with authors, by having to convince them that they will receive similar royalties from their work in a subscription service. In addition, Book Buzzr Blog sheds light on how independent authors lose out on valuable revenue from their books, which may leave them struggling to conceive of new self-marketing strategies, and in many cases leaves them unsuccessful altogether.

Furthermore, subscriptions pelt the publishing industry with new marketing obstacles; they now have to brainstorm ways to market a collection of books rather than the book itself. The act of doing so seems contradictory to the idea that a book is its own creative product. Michael Shatzkin voices in a blog post from 2012 that each book is “a separate creative and commercial endeavor, down to having its own contract, its own development path and schedule, and its own marketing requirements.” A novel is unlike a song or a film — the final product created after months, even years of hard work, provides an experience that cannot be digested as easily and quickly as an album can. Subscription services for different media, that operate in a similar “all you can eat” manner, such as Netflix (films) or Spotify (songs), all offer products that have a higher replay value than do books. In other words, it more sensible to clump large amounts of songs together and offer unlimited access to them, as they’re likely to be used more than once.

A third problem that should be mentioned is that in many cases, publishers may not have the rights from authors, artists, and other people involved in the production of the book, in order to distribute the ebook through a subscription service (Polanka, 2015, p. 66). This barricades publishers from divulging certain titles that would be valuable market-wise to Scribd and Kindle in the long run.

Finally, and very unfortunately, Scribd has recently come under fire for offering pirated versions of books. As noted previously, the service allows independent authors to upload their titles, many of which are the scanned pages of books that do not have a contract to be sold on the service. In November 2013, Teleread cites a story of how the novel To Kill A Mockingbird, by Harper Lee, was found to have been illegally uploaded multiple times for Scribd users. The blog relays that Scribd has set out measures to deal with piracy concerns, such as by updating their terms of agreement, by checking uploaded works against a pre-existing database, and by asking subscribers to report any potential abuses, though it’s safe to say that this service is far from perfect. While piracy occurs in other instances, Scribd is yet another avenue for consumers to steal from the author’s and the publisher’s benefits.

In the end, subscription-based ebooks benefit the reader. For those who read substantial portions every month, cheap, quick, unlimited access to thousands of books is like something out of a dream. However, before long it simply won’t be enough to encourage creative product and further the publishing industry’s aims due to the list of problems that directly harm both publishers’ and authors’ revenues, create legal confusion, and downplay the hard work and effort put into creating each individual book. Subscription ebook companies further prevent publishers and authors from controlling the flow of their products, and creating a direct relationship with their readers. If subscription services are to continue, they should be placed in the hand of publishers themselves, which would provide them with opportunities to establish this direct interaction with appropriate niche markets, while making full profits from their products, and allowing individual authors to benefit as well. To avoid such action may weaken the publishing industry as a whole.

 

Works Cited:

Oysterbooks Blog

http://blog.oysterbooks.com/post/122942822025/o

Dosdoce.com study on publishing business models in the digital age

http://www.dosdoce.com/2015/04/07/new-business-models-in-the-digital-age/

What do Subscription E-Book Services Really Mean for Indie Authors

http://www.bookbuzzr.com/blog/product-service-reviews/what-do-subscription-ebook-services-really-mean-for-indie-authors/

Scribd and Piracy: What Are They Doing to Stop it?

http://www.teleread.com/scribd/scribd-and-piracy-what-are-they-doing-to-stop-it/

Scribd Website: DMCA copyright infringement takedown notification policy

http://support.scribd.com/entries/22981-DMCA-copyright-infringement-takedown-notification-policy

Scribd: How do authors benefit from Scribd’s premium membership program?

http://support.scribd.com/entries/64067067-How-do-authors-benefit-from-Scribd-s-premium-membership-program-

Entitle Books to Close Tomorrow, But It Will Have Little Impact On the Subscription Ebook Market

http://the-digital-reader.com/2015/07/20/entitle-books-to-close-tomorrow-but-it-will-have-little-impact-on-the-subscription-ebook-market/

Are Ebook Subscription Services Worth It?

http://lifehacker.com/are-ebook-subscription-services-worth-it-1513205735

Subscription Services for Ebooks: Like Netflix, Spotify, or Not at All?

http://www.forbes.com/sites/billrosenblatt/2015/04/24/subscription-services-for-e-books-like-netflix-like-spotify-or-not-at-all/

Amazon Unlimited vs. Scribd vs. Oyster: Ebook subscriptions battle it out

http://www.cnet.com/how-to/amazon-kindle-unlimited-vs-scribd-vs-oyster-e-book-subscriptions/

Subscription models seem to me to be for ebook niches, not a general offer

http://www.idealog.com/blog/subscription-models-seem-to-me-to-be-for-ebook-niches-not-a-general-offer/

 

Polanka, S. (2013). Ebook Access: Business Models for Subscription Services. Online Searcher, 37(2), pp. 65-67. Retrieved from: ebscohost.com

 

Creative Commons License
The Viability of a Subscription-based Ebook Service by Adam Van der Zwan is licensed under a Creative Commons Attribution 4.0 International License.
Based on a work at https://pub401adam.wordpress.com/2015/11/11/pub-401-short-paper-2-the-viability-of-subscription-based-ebook-services/.
Permissions beyond the scope of this license may be available at https://pub401adam.wordpress.com/2015/11/11/pub-401-short-paper-2-the-viability-of-subscription-based-ebook-services/.

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